If you’re reading this, it’s likely that you’re at the point in your real estate life where you’re looking to transfer the ownership of your property. If you’re looking for more information or advice to better understand the process, take a look below at our guide that explains what you’ll need to do and know.
What Exactly Is Transfer of Equity?
This is the process of transferring the equity of ownership of a jointly owned property to one of the joint members so they own it outright. To fully grasp this concept, you need to know what equity is and why people decide to swap it to another person.
Typically, people refer to equity as how many shares someone has in a company. In real estate, it works in a relatable way. In this scenario, it is a legal term used to determine how much of your home you own as opposed to the bank. Say if you buy a house worth $200,000 and had a $50,000 to put towards the cost directly. To cover the remaining cost, you’d need to take out a $150,000 mortgage with a bank. Therefore, in legal terms, you own $50,000 of your house, meaning you have $50,000 of equity in the property.
When Would I Need to Do This?
This concept applies to people who share a property, say for example a married couple that took out a mortgage together, who are looking to get a divorce so they are looking to dissolve their property agreement.
In most cases, one party will want to keep the house rather than completely sell up. Where problems arise is when both partners own certain shares of the property so it’s not as straight forward as one party buying the other out. This is when the official transfer of equity proceedings are needed. Through transfer of equity, one partner can legally transfer ownership of a property to another, so that the other partner can then buy them out.
Through following these steps, this allows one party to relieve themselves of the ownership of the real estate and be removed from the deed. Furthermore, there are also relieved of mortgage obligations, which the remaining member will become responsible for. If partners can’t agree on these things this is commonly where disputes happen and lawyers are needed to ensure an outcome is achieved that is fair for both parties.
How Is It Transferred?
This is where lawyers are needed as it’s not so straight forward as it may seem. Therefore, it is best to hire conveyancing solicitors to do the legal work on your behalf. In standard practice, they will do the following:
- Take possession of the title deeds
- Prepare the ‘ToE’ deed and arrange for all parties to sign with witness’s present.
- Notify third parties who have any interest in the property (the bank that provided the mortgage).
- Calculate if stamp duty is payable with submissions to inland revenue
- Register the transfer
- Check the client’s legal identity
- Oversee the signing of the deed and remove the name as necessary
After the above list has been carried out the transfer is then complete. This is the basics of the transfer and how it legally allows you to go from a part owner to a sole owner in an official agreement. If you’re currently going through a separation and would like to find out more about getting this done, you willfirst need to decide on who is getting the property or what is happening with it. From there, contact transfer of equity solicitors who will get the ball rolling as efficiently and as fast as possible.